A noticeable shift in the market is making it increasingly difficult for older owners to sell their businesses. Let’s delve into this shift.

I help independently-owned businesses grow strategically and position so the owner can command a premium asking price when it’s time to sell. Ninety percent of my clients are Baby Boomers. This percentage reflects the aging demographic of independent owners in our sector. Maybe you’re a boomer (I am.) Even if you’re not planning to sell your business in the next few years, it’s probably on your mind. You’ll probably sell the business to a competitor, consolidator, family member, or employee. Or, you’ll sell off part or all of the business to an investment entity.

Any of these buyers might be under the age of 40. It’s an age group that’s a growing demographic for business owners. A recent study conducted by LendingTree reports that the average age of entrepreneurs across the 50 largest US metros is 36 years old. In the previous study, the average age was 40, confirming a trend toward younger owners.

Here’s the wrinkle. Young business owners may be unmotivated and uninterested in growing their business by acquiring a company from an older seller.  Young business people have told me they would rather work harder and pay more to buy from or work with someone closer to their own age. They’d prefer to make a cold outreach to a Gen X or Millennial than pursue a warm lead with a business owner who is 60, 70, or 80.

Recognizing sentiments about boomers

If you haven’t been tracking the “OK boomer” trend on social media, you should be aware of it. Young people blame us for the state of the world. They point the finger at us for the housing shortage and the inequality of wealth distribution in the world. They don’t necessarily want us to succeed. And they’re not always keen to see us exit our businesses with a pile of cash. Plus, M&A war stories about how difficult it is to work with older sellers in transactions make things worse for us. What can we do?

Seeing the strengths of the younger buyer

It may be hard to believe, but young buyers may be the most logical fit for us. They have energy, ideas, cash, and backers. Plus, they have a long runway to make the business successful if they’re inclined to hold onto it.
Furthermore, they may value the founder’s story, the location, the quirky charms of the business, and the experience and longevity of the employees. They may be more flexible about the terms of the sale, willing to retain your family members as employees, and interested in keeping you on as a consultant or operator, which some categories of buyers are not prone to do.

In many ways, it makes sense to take a close look at the younger buyer as well suited to take over an entrepreneurial business. How do they see us as an acquisition target? Not so great, unfortunately.

Establishing a gameplan for the older seller

In the eyes of young people today, we’re all “boomers” and “senior citizens.” (I hate that term.) Anyone with gray hair gets lumped into the category.

One way to deal with bias is to anticipate where we’ll encounter it and address it proactively. For example, if my client receives a query from a young buyer, we make sure we launch the relationship properly.

We determine their preferred communication process; we understand all the players who will be involved; we set up or enter their secure channel for communications and file sharing; we anticipate their questions by researching them; and, finally, we ensure our outward-facing elements are consistent and there’s nothing out there to undermine the seller’s image or messaging.

I realize that a lot of how I describe young buyers reflects my own biases. However, it’s better to be overly accommodating than overly rigid.

Working with the buyer’s team

An essential part of our research on the buyer is how their acquisitions team is organized. Who’s in charge? Is there a small or large team? And is the hierarchy flat, which can be common with younger teams?

It used to be that we’d have just a few points of contact with the buying entity – the decision maker, their attorney, and an admin person. These days, many buying teams are more like committees. The members have an equal voice in which deals proceed and which do not.

Working with flat-hierarchy teams can slow things down from the seller’s perspective. It can be frustrating for the seller to wait for the buying team to get approval or feedback from the members.

As sellers, we must set aside our notions of command and control and how we would handle things if we were the buyers. We have to take a deep breath and be zen about it.

Attracting younger buyers

Older sellers tell me they aren’t interested in pandering to the younger set. They don’t want to go to the trouble to attract them, and they don’t want to conform to their needs and preferences.

Just remember, the number of young buyers goes up every year. And the more buyers you attract, the more leverage you have.

For older sellers to attract the attention of younger buyers and keep them engaged throughout the deal, we must learn what makes them tick. Doing so helps us frame the business to catch their eye and trigger
their imaginations.

Ideally, we do this while building the business before putting it on the market to get on their radar.

Presenting yourself as an attractive seller

Attracting young buyers starts with a cohesive presence. We need to look at everything through their eyes: how you present the business as a seller, your materials, your legal contracts, your website and online brand, how you show up at meetings, and how you handle the buyer’s requests for information. Positioning the business is more than a marketing process – it’s the context in which you present yourself before and during the sale.

Honoring the quirks of the younger buyer

In addition, we have to understand the behavior of the younger buyer. Foremost, we have to be flexible in how they communicate, their level of commitment to schedules and appointments, and the likelihood they have a team of influencers who are in their ear about the sale. For example, young buyers, especially their point people, are more likely to consider appointments as rough suggestions and not commitments.

Even a few years ago, we’d view it as disrespectful if the buyer brought unexpected people to the meeting, asked for a verbal summary of the deal instead of reading what we sent in advance, or sent minions instead of showing up themselves. I, too, was insulted when buyers would cancel meetings the same day. Now, we send calendar reminders, ask for commitments in fine-tuned language, and incorporate Loom or other video conversation tools to keep things moving.  With younger buyers, we can’t consider it a sign of rejection if the buyer stops communicating, lags on signing paperwork, or gets distracted by another deal happening in parallel. We have to remove our ego from the process.

Helping the buyer be successful

I remind clients that the young buyer’s approach is becoming the new normal, and it falls on us to help buyers stay focused and interested. Accommodating them is not just about being accessible but also about fostering a sense of connection and engagement with the buyer. Here are areas that are helpful in working with younger buyers:

1. Be familiar with all the elements of the sale so we’re not taken by surprise. Younger buyers are more likely to assume we have the life experience to understand everything, which is flattering but not always helpful.

2. Show grace, and don’t inflict rules on an age group that won’t play that game.

3. Open all lines of communication. Monitor all channels where they reach out to meet you or converse. Point your social media to an email address you alone monitor so your employees do not see these conversations. Move queries to a secure channel once the relationship is established.

4. Don’t overwhelm them with multiple texts or emails. Something as mundane as three text messages in a row can be seen as aggressive.

5. Break the stereotypes of what it’s like to work with an older seller. How we interact is an opportunity to show that we are not stuck in the past but are forward-thinking in our approach to business.

Finally, we must educate young people about the benefits of buying a mature, thriving business from an experienced and successful owner.

Embracing a new generation of buyers

It’s a fact. Today’s buyers and dealmakers are trending younger. It’s a demographic we should understand so we can present your business in a memorable and enticing way. I can help you handle the emerging challenges of being an older seller in today’s buy-sell environment. Being prepared for the young buyer is something you can start today.

Positioning for success with a younger buyer

When selling our business to younger buyers, making the right first impression is paramount. When running companies in my heyday, I was taught to be strong, firm, and skeptical. That personality can turn off today’s young business people.

I have found those under 40 in my network want to minimize conflict, deplore posturing, prefer to pay a fair initial price (whether buying a business or buying our services), avoid lengthy back and forths, and may refuse to engage or reply until they’re ready to act.

In the M&A environment, under-40 buyers respect the seller who is knowledgeable but not a know-it-all, confident but not a braggart, capable but not trying to take over the deal, and organized with evidence supporting the asking price.

It’s vital that we do not reinforce stereotypes that weaken our position. As older sellers, we can’t come across as doddering, clueless, tedious, difficult, curmudgeonly, fretful, forgetful, or afraid of technology.

We can’t allow ourselves to be portrayed as controlling, self-centered, uncompassionate to employees, uncaring about the environment, or greedy. Qualities like these sabotage the sale and make us unlikeable.
Remember, young people inevitably move in as boomers age out of our industry. We don’t have to step aside but must understand what we’re dealing with during this process.

Being prepared to work with young buyers means positioning the owner and business in a way that doesn’t reinforce negative stereotypes. Be sure to include this step in your strategy and planning. You want to enter the deal confidently, engage with the buyer in the ways they are comfortable with, and keep things rolling.

The best outcomes are win-win, and this approach puts you in a success mindset with the younger buyer.

Sandy Hubbard is a chief marketing advisor who helps position businesses strategically and powerfully. She advises specialty print manufacturers, converters, and finishers – helping them improve, grow, and position powerfully in a world of rising competition.  Her tenure in the industry has fostered business growth and success, allowing clients to make a difference in the world.